China outstanding orders of U.S. dried distillers’ grains, a corn-based feed ingredient, are at risk or being canceled as the country continues to reject a genetically modified strain, Shanghai JC Intelligence Co. said.

When producing ethanol the main co product is so called DDGS, Distillers grain,  a very protein rich product used for animal feed.  China is buing lot’s of this from USA, but China also have strict rules against genmodified crops.

The bulk-carrier-sized shipments for delivery between January and March were contracted before inspectors began refusing imports containing the insect-resistant MIR 162 gene, Sylvia Shi, an analyst at the Shanghai-based agricultural researcher said to Bloomberg News Jan. 8.

A halt in the biggest buyer China’s purchases of DDGS will hurt prices of corn and reduce profits for ethanol producers.

“China’s buying had been the driver for the surge in DDGS prices, and now with this ban, prices in the U.S. will drop,” Shi, a Shanghai JC analyst said on Jan. 8.

China was projected to double imports of the by-product to 4 million tons in the year ending Sept. 30 from a year ago, according to state-owned researcher

Two bulk carriers loaded with DDGS are moored at ports in southern Guangdong province, as their owners, anticipating further rejections, wait to see if the government loosens controls, Shi said.